C-17`s Funding Could Benefit Pratt & Whitney

March 1, 1985|By Marcia H. Pounds, Business Writer

Pratt & Whitney`s facility in northwest Palm Beach County could benefit to the tune of $2.5 billion to $3.4 billion if Congress approves funding for C-17 transport aircraft, according to one industry analyst.

The U.S. Air Force this week announced approval of the C-17`s development by the Department of Defense. The C-17 aircraft, produced by Douglas Aircraft Co. in Long Beach, Calif., is powered by Pratt`s PW2037 engines.

``It`s going to mean some incremental business to Pratt & Whitney, but it will take a few years to come about,`` said Christopher Demisch, an analyst with First Boston Corp. in New York who follows Pratt.

But Demisch said the business is important because ``there are very few new airplanes coming down the pipe.``

Richard Dalton, Pratt`s spokesman at its Government Products Division in Palm Beach County, said the company believes it`s too early to determine the value or potential impact of the subcontract on the company or its local employment. The Air Force said final design and testing phases of the C-17 will continue through 1992.

But Dalton added, ``This idea of full-scale development is a major step toward full-scale production.``

Before production of the C-17 can begin, Congress must approve funding. Total cost of the development program is estimated at $4 billion; Congress has earmarked $123 million for C-17 development during fiscal 1985.

The Air Force Airlift Master Plan calls for purchase of 210 C-17 aircraft by 1998. The C-17 -- which is 175 feet long, has a wingspan of 165 feet and is 65 feet tall -- is powered by four engines. Each engine costs $3 million to $4 million, estimated Demisch.

That would mean Pratt`s subcontract with Douglas Aircraft would be valued at $2.5 billion to $3.4 billion. Additional revenue would be derived from sales of spares.

To put the potential sale in perspective, in January Pratt scored what the company considers a major sale when it received 46 percent of a total $1.3 billion contract for its F-100 engines, which power the F-15 and F-16 fighter jets. The rest of that annual contract allotment went to General Electric, Pratt`s prime competitor for government business.

Pratt is the only aircraft company that has a subcontract with Douglas Aircraft to produce an engine for the C-17. The contract was signed in late 1983, Dalton said.

Pratt also announced Thursday it received a $25 million engine order from Scandinavian Airlines for JT 8D-219 engines to power five McDonnell Douglas MD-80 twinjets. The new order is for 10 installed engines and two spares; the airline also took options on 18 more MD-80 aircraft.